RIM’s has seen its second quarter profits slide to less than half of what it generated in the previous quarter, and to a little over 40 per cent of what it made in the same quarter last year.

The company’s quarterly earnings statement for 2Q11 revealed that its net income for the quarter was $329m. This marks a steep drop from the $695m it recorded in 1Q11, and an even steeper fall from the $797m made in 2Q10.

Revenue for the quarter was also down 15 per cent to just $4.2bn from $4.9bn generated in the previous quarter, and down ten per cent from $4.6bn in the same quarter of last year.

On the plus side, the firm said that its BlackBerry subscriber base grew 40 per cent year over year to surpass 70 million, while service revenue surpassed $1bn for the first time.

Canadian merchant bank Jaguar Financial, a RIM shareholder, recently called on the Blackberry maker to begin a “value maximisation process” that may include the sale of the firm.  It cited various reasons as drivers for transformational change and noted that competitors have seen a significant increase in market share at RIM’s expense, both in the enterprise and consumer markets.

“While its rivals have demonstrated an ability to develop and market products with features that inspire consumer enthusiasm and drive higher adoption rates, RIM has clearly fallen short,” the company said in a statement.

“Its failure to offer products with innovative features, combined with its limited selection of applications, has resulted in RIM losing market share to its competitors.”

Ovum analyst Adam Leach said that the poor performance was due to the fact that RIM’s range of Blackberry smartphones that were sold over the quarter had been in the market for some time, and that the firm needed to bring new models to market.

“We expect RIM’s new range of Blackberry smartphones based, on the Blackberry OS 7 to increase demand and shipment volumes for RIM in Q3,” said Leach.

“RIM now needs to focus its attention on its next portfolio refresh and ensure a smooth transition to the QNX platform, which is used in the Blackberry PlayBook.”

RIM said that it expects BlackBerry smartphone shipments in Q3 to grow between 27 to 37 per cent over 2Q11.